The Federal Trade Commission announced a proposed settlement with Google concerning the rollout of its Buzz social-networking system. This is the latest action concerning substantial privacy concerns about Google’s Buzz. In November, the online services giant sent an e-mail to all Gmail users announcing that it has settle the class action privacy lawsuit filed after the disastrous launch of its social-networking service Google Buzz. The company changed some of the privacy settings available in Google Buzz after numerous concerns were raised about privacy issues after the initial release of the social-networking service.

Now, the FTC says:

Google Inc. has agreed to settle Federal Trade Commission charges that it used deceptive tactics and violated its own privacy promises to consumers when it launched its social network, Google Buzz, in 2010. The agency alleges the practices violate the FTC Act. The proposed settlement bars the company from future privacy misrepresentations, requires it to implement a comprehensive privacy program, and calls for regular, independent privacy audits for the next 20 years. This is the first time an FTC settlement order has required a company to implement a comprehensive privacy program to protect the privacy of consumers’ information. In addition, this is the first time the FTC has alleged violations of the substantive privacy requirements of the U.S.-EU Safe Harbor Framework, which provides a method for U.S. companies to transfer personal data lawfully from the European Union to the United States. […]

According to the FTC complaint, Google launched its Buzz social network through its Gmail web-based email product. Although Google led Gmail users to believe that they could choose whether or not they wanted to join the network, the options for declining or leaving the social network were ineffective. For users who joined the Buzz network, the controls for limiting the sharing of their personal information were confusing and difficult to find, the agency alleged.

On the day Buzz was launched, Gmail users got a message announcing the new service and were given two options: “Sweet! Check out Buzz,” and “Nah, go to my inbox.” However, the FTC complaint alleged that some Gmail users who clicked on “Nah…” were nonetheless enrolled in certain features of the Google Buzz social network. For those Gmail users who clicked on “Sweet!,” the FTC alleges that they were not adequately informed that the identity of individuals they emailed most frequently would be made public by default. Google also offered a “Turn Off Buzz” option that did not fully remove the user from the social network. […]

Finally, the agency alleges that Google misrepresented that it was treating personal information from the European Union in accordance with the U.S.-EU Safe Harbor privacy framework. The framework is a voluntary program administered by the U.S. Department of Commerce in consultation with the European Commission. To participate, a company must self-certify annually to the Department of Commerce that it complies with a defined set of privacy principles. The complaint alleges that Google’s assertion that it adhered to the Safe Harbor principles was false because the company failed to give consumers notice and choice before using their information for a purpose different from that for which it was collected.

The proposed settlement bars Google from misrepresenting the privacy or confidentiality of individuals’ information or misrepresenting compliance with the U.S.-E.U Safe Harbor or other privacy, security, or compliance programs. The settlement requires the company to obtain users’ consent before sharing their information with third parties if Google changes its products or services in a way that results in information sharing that is contrary to any privacy promises made when the user’s information was collected. The settlement further requires Google to establish and maintain a comprehensive privacy program, and it requires that for the next 20 years, the company have audits conducted by independent third parties every two years to assess its privacy and data protection practices. […]

The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through May 2, 2011, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in electronic form should be submitted using the following web link: https://ftcpublic.commentworks.com/ftc/googlebuzz and following the instructions on the web-based form.